The Light and the Heat: Productivity Co-benefits of Energy-saving Technology

Working Paper
Published on 1 February 2018

Abstract

Measurement of the full costs and benefits of energy-saving technologies is often difficult, confounding adoption decisions. Adhvaryu et al. (2017) study consequences of the adoption of energy-efficient LED lighting in garment factories around Bangalore, India. They combine daily production line-level data with weather data and estimate a negative, nonlinear productivity-temperature gradient. They find that LED lighting, which emits less heat than conventional bulbs, decreases the temperature on factory floors, and thus raises productivity, particularly on hot days. Using the firm’s costing data, they estimate the pay-back period for LED adoption is one-sixth the length after accounting for productivity co-benefits.

Authors

Achyuta Adhvaryu

University of Michigan

Anant Nyshadham

University of Southern California